Rackspace Q2 revenue down 3%
Overview
Rackspace Q2 revenue down 3% yr/yr, beats analyst expectations, per LSEG data
Adjusted EPS for Q2 misses analyst estimates
Non-GAAP operating profit up 34% yr/yr
Outlook
Rackspace expects Q3 2025 revenue of $660 mln to $674 mln
Company anticipates Q3 2025 private cloud revenue of $246 mln to $254 mln
Rackspace forecasts Q3 2025 public cloud revenue at $414 mln to $420 mln
Non-GAAP operating profit for Q3 2025 seen at $30 mln to $32 mln
Result Drivers
REVENUE DECLINE - Q2 revenue fell 3% year-over-year to $666 mln, with private cloud revenue down 4% and public cloud revenue down 2%, as per the company
BOOKINGS GROWTH - Bookings increased by 16% year-over-year, reflecting strong go-to-market execution across business units, according to CEO Amar Maletira
OPERATING PROFIT INCREASE - Non-GAAP operating profit rose 34% year-over-year to $27 mln, attributed to improved go-to-market execution, per CEO Amar Maletira
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q2 Revenue | Beat | $666.30 mln | $659.40 mln (4 Analysts) |
Q2 Adjusted EPS | Miss | -$0.06 | -$0.05 (4 Analysts) |
Q2 Net Income | -$54.50 mln | ||
Q2 Adjusted Operating Income | Miss | $27 mln | $27.20 mln (3 Analysts) |
Q2 Capex | $31 mln | ||
Q2 Gross Profit | $129.20 mln |
Analyst Coverage
The current average analyst rating on the shares is "hold" and the breakdown of recommendations is no "strong buy" or "buy", 4 "hold" and 1 "sell" or "strong sell"
The average consensus recommendation for the it services & consulting peer group is "buy."
Wall Street's median 12-month price target for Rackspace Technology Inc is $1.68, about 27.2% above its August 6 closing price of $1.22
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